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Amended Forms

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Amended Forms

Amended forms 35. Amended forms   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. Amended forms They are: The American opportunity credit, and The lifetime learning credit. Amended forms The chapter will present an overview of these education credits. Amended forms To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. Amended forms Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. Amended forms For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. Amended forms   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. Amended forms   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. Amended forms This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Amended forms Table 35-1. Amended forms Comparison of Education Credits Caution. Amended forms You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. Amended forms   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. Amended forms   There are several differences between these two credits. Amended forms These differences are summarized in Table 35-1, later. Amended forms Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. Amended forms The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. Amended forms For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). Amended forms Academic period. Amended forms   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Amended forms In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Amended forms Eligible educational institution. Amended forms   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Amended forms S. Amended forms Department of Education. Amended forms It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amended forms The educational institution should be able to tell you if it is an eligible educational institution. Amended forms   Certain educational institutions located outside the United States also participate in the U. Amended forms S. Amended forms Department of Education's Federal Student Aid (FSA) programs. Amended forms Who can claim a dependent's expenses. Amended forms   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. Amended forms Therefore, only that person can claim an education credit for the student. Amended forms If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. Amended forms Expenses paid by a third party. Amended forms   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Amended forms However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Amended forms Therefore, you are treated as having paid expenses that were paid by the third party. Amended forms For more information and an example see Who Can Claim a Dependent's Expenses in Pub. Amended forms 970, chapter 2 or 3. Amended forms Who cannot claim a credit. Amended forms   You cannot take an education credit if any of the following apply. Amended forms You are claimed as a dependent on another person's tax return, such as your parent's return. Amended forms Your filing status is married filing separately. Amended forms You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. Amended forms Your MAGI is one of the following. Amended forms American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). Amended forms Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . Amended forms   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. Amended forms However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. Amended forms For details, see Pub. Amended forms 970. Amended forms    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. Amended forms The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. Amended forms However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. Amended forms You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Amended forms See Pub. Amended forms 970 for information on other education benefits. Amended forms Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. Amended forms It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. Amended forms For course-related books, supplies, and equipment, only certain expenses qualify. Amended forms American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Amended forms Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. Amended forms Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. Amended forms However, fees for personal expenses (described below) are never qualified education expenses. Amended forms Qualified education expenses for either credit do not include amounts paid for: Personal expenses. Amended forms This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. Amended forms Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. Amended forms You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). Amended forms However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). Amended forms In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. Amended forms Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Amended forms Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Amended forms If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. Amended forms Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. Amended forms See Adjustments to Qualified Education Expenses, later. Amended forms Prepaid Expenses. Amended forms   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. Amended forms See Academic period , earlier. Amended forms For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Amended forms    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Amended forms Paid with borrowed funds. Amended forms   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. Amended forms Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. Amended forms Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Amended forms Student withdraws from class(es). Amended forms   You can claim an education credit for qualified education expenses not refunded when a student withdraws. Amended forms No Double Benefit Allowed You cannot do any of the following. Amended forms Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. Amended forms Claim more than one education credit based on the same qualified education expenses. Amended forms Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Amended forms Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. Amended forms See Adjustments to Qualified Education Expenses, next. Amended forms Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. Amended forms The result is the amount of adjusted qualified education expenses for each student. Amended forms Tax-free educational assistance. Amended forms   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Amended forms See Academic period , earlier. Amended forms      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. Amended forms 970), The tax-free part of Pell grants (see chapter 1 of Pub. Amended forms 970), The tax-free part of employer-provided educational assistance (see Pub. Amended forms 970), Veterans' educational assistance (see chapter 1 of Pub. Amended forms 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Amended forms Generally, any scholarship or fellowship is treated as tax-free educational assistance. Amended forms However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Amended forms 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Amended forms 970, chapter 1. Amended forms You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. Amended forms For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. Amended forms 970. Amended forms Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Amended forms This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Amended forms If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. Amended forms If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. Amended forms Refunds. Amended forms   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. Amended forms Some tax-free educational assistance received after 2013 may be treated as a refund. Amended forms See Tax-free educational assistance, earlier. Amended forms Refunds received in 2013. Amended forms   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Amended forms Refunds received after 2013 but before your income tax return is filed. Amended forms   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. Amended forms Refunds received after 2013 and after your income tax return is filed. Amended forms   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. Amended forms See Credit recapture, next. Amended forms Credit recapture. Amended forms    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Amended forms You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Amended forms You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Amended forms Include that amount as an additional tax for the year the refund or tax-free assistance was received. Amended forms Example. Amended forms    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. Amended forms You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . Amended forms 20). Amended forms You claimed no other tax credits. Amended forms After you filed your return, your child withdrew from two courses and you received a refund of $1,400. Amended forms You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). Amended forms The refigured credit is $1,320 and your tax liability increased by $280. Amended forms You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. Amended forms See the instructions for your 2014 income tax return to determine where to include this tax. Amended forms If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Amended forms Amounts that do not reduce qualified education expenses. Amended forms   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Amended forms   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Amended forms The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. Amended forms 970. Amended forms The use of the money is not restricted. Amended forms   For examples, see chapter 2 in Pub. Amended forms 970. Amended forms Figure 35-A. Amended forms Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. Amended forms Please click the link to view the image. Amended forms Figure 35-A. Amended forms Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications
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Understanding your CP31 Notice

Your refund check was returned to us, so you need to update your address.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

Update your address in one of the following ways:

  • Online: Go to Where’s My Refund? to complete your change of address online, you’ll need your Social Security number, filing status, and the amount of your refund.
  • By phone: Call the number listed on your notice.
  • By mail: Complete and mail the Contact information section that came with your notice.

Answers to Common Questions

When will I receive my refund check?
You should receive your refund 3-4 weeks after you submit your correct address. For information about your refund, go to Where’s My Refund? or call the IRS toll free at 1-800-829-1954. You’ll need to provide your Social Security Number (or Individual Taxpayer Identification Number), your filing status and the exact whole dollar amount of your refund.

What do I need to do to get my refund through direct deposit next year?
When filing your tax return, complete the requested banking information in the "Refund" section of your tax form if you want to direct deposit the entire amount into one account. If you want to deposit into more than one account, you must file Form 8888, Direct Deposit of Refund to More Than One Account, with your return.

Since my refund check was returned, can I request that you mail it to my work address instead?
Refund checks are mailed only to the address of record, which is the address provided on the tax return or the result of a permanent address change request submitted after the return is filed.

I filed jointly, but my spouse and I are now divorced. Where will you send the refund? Can you send us two checks?
A refund check is mailed to the address of record, which is the address provided on the tax return or the result of a permanent address change request submitted after the return is filed.
 
The IRS issues one check per return.


Tips for next year

To receive your refund more quickly, consider requesting your refund through direct deposit. You can even request that your refund be distributed to separate accounts, such as checking, savings, or retirement accounts. To request this, use Form 8888, Direct Deposit of Refund to More Than One Account.

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 19-Mar-2014

The Amended Forms

Amended forms 1. Amended forms   Importance of Records Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Benefits of Recordkeeping Kinds of Records To Keep How Long To Keep Records Introduction A farmer, like other taxpayers, must keep records to prepare an accurate income tax return and determine the correct amount of tax. Amended forms This chapter explains the benefits of keeping records, what kinds of records you must keep, and how long you must keep them for federal tax purposes. Amended forms Tax records are not the only type of records you need to keep for your farming business. Amended forms You should also keep records that measure your farm's financial performance. Amended forms This publication only discusses tax records. Amended forms The Farm Financial Standards Council has produced a publication that provides a detailed explanation of the recommendations of the Council for financial reporting and analysis. Amended forms For information on recordkeeping, you can purchase and download Financial Guidelines for Agricultural Producers at www. Amended forms ffsc. Amended forms org. Amended forms For more information, contact Countryside Marketing, Inc. Amended forms in the following manner. Amended forms Call 262-253-6902. Amended forms Send a fax to 262-253-6903. Amended forms Write to: Farm Financial Standards Council N78 W14573 Appleton Ave. Amended forms , #287 Menomonee Falls, WI 53051. Amended forms Topics - This chapter discusses: Benefits of recordkeeping Kinds of records to keep How long to keep records Useful Items - You may want to see: Publication 51 (Circular A), Agricultural Employer's Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses See chapter 16 for information about getting publications. Amended forms Benefits of Recordkeeping Everyone in business, including farmers, must keep appropriate records. Amended forms Recordkeeping will help you do the following. Amended forms Monitor the progress of your farming business. Amended forms   You need records to monitor the progress of your farming business. Amended forms Records can show whether your business is improving, which items are selling, or what changes you need to make. Amended forms Records can help you make better decisions that may increase the likelihood of business success. Amended forms Prepare your financial statements. Amended forms   You need records to prepare accurate financial statements. Amended forms These include income (profit and loss) statements and balance sheets. Amended forms These statements can help you in dealing with your bank or creditors and help you to manage your farm business. Amended forms Identify source of receipts. Amended forms   You will receive money or property from many sources. Amended forms Your records can identify the source of your receipts. Amended forms You need this information to separate farm from nonfarm receipts and taxable from nontaxable income. Amended forms Keep track of deductible expenses. Amended forms   You may forget expenses when you prepare your tax return unless you record them when they occur. Amended forms Prepare your tax returns. Amended forms   You need records to prepare your tax return. Amended forms For example, your records must support the income, expenses, and credits you report. Amended forms Generally, these are the same records you use to monitor your farming business and prepare your financial statements. Amended forms Support items reported on tax returns. Amended forms   You must keep your business records available at all times for inspection by the IRS. Amended forms If the IRS examines any of your tax returns, you may be asked to explain the items reported. Amended forms A complete set of records will speed up the examination. Amended forms Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Amended forms You can choose any recordkeeping system suited to your farming business that clearly shows, for example, your income and expenses. Amended forms You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Amended forms See  chapter 2. Amended forms If you are in more than one business, you should keep a complete and separate set of records for each business. Amended forms A corporation should keep minutes of board of directors' meetings. Amended forms Your recordkeeping system should include a summary of your business transactions. Amended forms This summary is ordinarily made in accounting journals and ledgers. Amended forms For example, they must show your gross income, as well as your deductions and credits. Amended forms In addition, you must keep supporting documents. Amended forms Purchases, sales, payroll, and other transactions you have in your business generate supporting documents such as invoices and receipts. Amended forms These documents contain the information you need to record in your journals and ledgers. Amended forms It is important to keep these documents because they support the entries in your journals and ledgers and on your tax return. Amended forms Keep them in an orderly fashion and in a safe place. Amended forms For instance, organize them by year and type of income or expense. Amended forms Electronic records. Amended forms   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Amended forms When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Amended forms An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Amended forms The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Amended forms All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Amended forms Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Amended forms The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Amended forms You still have the responsibility of retaining any other books and records that are required to be retained. Amended forms The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Amended forms This test is not considered an examination and the results must be shared with you. Amended forms If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Amended forms If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copybooks and records in a manner that allows you and the IRS to determine your correct tax. Amended forms For details on electronic storage system requirements, see Rev. Amended forms Proc. Amended forms 97-22. Amended forms You can find Rev. Amended forms Proc. Amended forms 97-22 on page 9 of Internal Revenue Bulletin 1997-13 at  www. Amended forms irs. Amended forms gov/pub/irs-irbs/irb97-13. Amended forms pdf. Amended forms Travel, transportation, entertainment, and gift expenses. Amended forms   Specific recordkeeping rules apply to these expenses. Amended forms For more information, see Publication 463. Amended forms Employment taxes. Amended forms   There are specific employment tax records you must keep. Amended forms For a list, see Publication 51 (Circular A). Amended forms Excise taxes. Amended forms   See How To Claim a Credit or Refund in chapter 14 for the specific records you must keep to verify your claim for credit or refund of excise taxes on certain fuels. Amended forms Assets. Amended forms   Assets are the property, such as machinery and equipment, you own and use in your business. Amended forms You must keep records to verify certain information about your business assets. Amended forms You need records to figure your annual depreciation deduction and the gain or (loss) when you sell the assets. Amended forms Your records should show all the following. Amended forms When and how you acquired the asset. Amended forms Purchase price. Amended forms Cost of any improvements. Amended forms Section 179 deduction taken. Amended forms Deductions taken for depreciation. Amended forms Deductions taken for casualty losses, such as losses resulting from fires or storms. Amended forms How you used the asset. Amended forms When and how you disposed of the asset. Amended forms Selling price. Amended forms Expenses of sale. Amended forms   The following are examples of records that may show this information. Amended forms Purchase and sales invoices. Amended forms Real estate closing statements. Amended forms Canceled checks. Amended forms Bank statements. Amended forms Financial account statements as proof of payment. Amended forms   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Amended forms These include account statements prepared for the financial institution by a third party. Amended forms These account statements must be legible. Amended forms The following table lists acceptable account statements. Amended forms IF payment is by. Amended forms . Amended forms . Amended forms THEN the statement must show the. Amended forms . Amended forms . Amended forms Check Check number. Amended forms Amount. Amended forms Payee's name. Amended forms Date the check amount was posted to the account by the financial institution. Amended forms Electronic funds  transfer Amount transferred. Amended forms Payee's name. Amended forms Date the transfer was posted to the account by the financial institution. Amended forms Credit card Amount charged. Amended forms Payee's name. Amended forms Transaction date. Amended forms    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Amended forms You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Amended forms Tax returns. Amended forms   Keep copies of your filed tax returns. Amended forms They help in preparing future tax returns and making computations if you file an amended return. Amended forms Keep copies of your information returns such as Form 1099, Schedule K-1, and Form W-2. Amended forms How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Amended forms Keep records that support an item of income or a deduction appearing on a return until the period of limitations for the return runs out. Amended forms A period of limitations is the period of time after which no legal action can be brought. Amended forms Generally, that means you must keep your records for at least 3 years from when your tax return was due or filed or within 2 years of the date the tax was paid, whichever is later. Amended forms However, certain records must be kept for a longer period of time, as discussed below. Amended forms Employment taxes. Amended forms   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Amended forms Assets. Amended forms   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Amended forms You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure your basis for computing gain or (loss) when you sell or otherwise dispose of the property. Amended forms   You may need to keep records relating to the basis of property longer than the period of limitation. Amended forms Keep those records as long as they are important in figuring the basis of the original or replacement property. Amended forms Generally, this means as long as you own the property and, after you dispose of it, for the period of limitations that applies to you. Amended forms For example, if you received property in a nontaxable exchange, you must keep the records for the old property, as well as for the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Amended forms For more information on basis, see chapter 6. Amended forms Records for nontax purposes. Amended forms   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Amended forms For example, your insurance company or creditors may require you to keep them longer than the IRS does. Amended forms Prev  Up  Next   Home   More Online Publications